Palm Oil Drop Facilitates MYR Sales But Greenback Weakness Brings Stabilisation

Spot USD/MYR sits slightly higher but remains stable as greenback buying interest has petered out in early Asia trade, after the rate soared past MYR4.6000 for the first time since the 1998 Asian financial crisis on Monday. When this is being typed, USD/MYR operates at MYR4.6048, up 13 pips on the day.

• Topside technical focus falls on MYR4.6100, which represents two consecutive intraday highs from Jan 1998. The next layer of resistance is provided by MYR4.8850, the all-time high for the pair. Bears look for a dip below the 50-DMA, which kicks in at MYR4.4865.
• Palm oil futures dropped to fresh cyclical lows Monday, coming under pressure from a combination of (1) general weakness in the broader commodity complex amid firm risk-off tone, (2) lingering concerns over the supply gluts in Indonesia and Malaysia, and (3) bleak price forecast from influential trader Mistry.
• High-frequency data from AmSpec Agri confirmed a jump in Malaysian palm oil shipments in the first 25 days of the month, initially shown in Intertek report. AmSpec said exports rose 18.6% M/M after Intertek reported a 20.89% M/M increase.
• The market remains on the lookout for any hints on the likely timing of Malaysia's next general election, with ruling party top brass set to discuss the matter on Friday.